A short sale is the sale of an asset or stock the seller does not own. It is generally a transaction in which an investor sells borrowed securities in anticipation of a price decline; the seller is then required to return an equal number of shares at some point in the future. In contrast, a seller owns the security or stock in a long position.
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the holder at maturity, which is customarily $1,000. The face value for bonds is often referred to as par value or simply par.
The industrial goods sector is a category of stocks of companies who produce capital goods used in construction and manufacturing. Businesses in the industrial goods sector make and sell machinery, equipment, and supplies that are used to produce other goods rather than sold directly to consumers.
Non-negotiable refers to the price of a good or security that is firmly established and cannot be adjusted, or a part of a contract or deal that is considered a requirement by one or both involved parties. Additionally, the term can relate to a good or security whose ownership is not easily transferable from one party to another.
Yield to worst is a measure of the lowest possible yield that can be received on a bond that fully operates within the terms of its contract without defaulting. It is a type of yield that is referenced when a bond has provisions that would allow the issuer to close it out before it matures. Early retirement of the bond could be forced through a few different provisions detailed in the bond’s contract, most commonly callability. The yield to worst metric is used to evaluate the worst-case scenario for yield at the earliest allowable retirement date. YTW helps investors manage risks and ensure that specific income requirements will still be met even in the worst scenarios.
International Financial Reporting Standards (IFRS) set common rules so that financial statements can be consistent, transparent and comparable around the world. IFRS are issued by the International Accounting Standards Board (IASB). They specify how companies must maintain and report their accounts, defining types of transactions and other events with financial impact. IFRS were established to create a common accounting language, so that businesses and their financial statements can be consistent and reliable from company to company and country to country.
Initial margin is the percentage of the purchase price of a security that must be covered by cash or collateral when using a margin account. The current initial margin requirement set by the Federal Reserve Board’s Regulation T is 50%. However, this regulation is only a minimum requirement, where equity brokerage firms may set their initial margin requirement higher than 50%.
This Securities & Exchange Commission (SEC) stipulation requires a company that exceeds 2,000 individual investors with more than $10 million in assets to file its financials with the commission. According to SEC rules, such a company has 120 days to file following its fiscal year’s end.
Liquidated damages are presented in certain legal contracts as an estimate of otherwise intangible or hard-to-define losses to one of the parties. It is a provision that allows for the payment of a specified sum should one of the parties be in breach of contract.
This Securities & Exchange Commission (SEC) stipulation requires a company that exceeds 2,000 individual investors with more than $10 million in assets to file its financials with the commission. According to SEC rules, such a company has 120 days to file following its fiscal year’s end.